Amazon’s latest acquisition in its ever-growing WiFi technology platform is the mesh networking pioneer eero systems. The deal was announced on February 11, 2019.

Eero, along with Luma, was among the first home networking suppliers to optimize enterprise-grade mesh networking technologies for residential CPE. This innovation meets two goals: improving WiFi coverage by using a series of mesh-connected access points and providing an improved level of network control when compared to the clunky user interfaces typically found on WiFi routers.

Eero’s products and platforms address a growing set of problems with home WiFi. One common problem is that traditional home routers, while powerful enough to generate a signal for most of a home, often have limited and clunky user interfaces. This makes it challenging for users to set specific network parameters or preferences. A second problem in larger or older homes is that brick and cinder block walls can quickly dampen a WiFi signal, creating dead spots. Historically, these dead spots have been addressed through the use of WiFi extenders, which simply repeat the signal generated by the central access point.

However, the problem with traditional WiFi extenders is two-fold:

  • The extender can only do its job when it can detect the original WiFi signal.
  • Each time the signal is repeated or extended, signal loss occurs to the tune of a 30% to 60% reduction in throughput.

Mesh networking capabilities from Plume, eero, Luma, Google, NetGear, D-Link, and similar companies do a far better job of maintaining a clean wireless signal though they still rely on signal repetition. By spacing multiple units throughout a home, these systems effectively create multi-hop communications for wireless devices. Essentially, when a wireless device receives or transmits data, it is either the first leg or anchor in a WiFi relay race. The data transfer then hops from one access point to another until it reaches the primary access point, which is connected to the DSL, cable, or fiber gateway. The multi-hop attributes of a mesh network reduce the distance the wireless signal must hop from one point to the next.

Just as important as strengthening the home WiFi signal is the increased control users will have over their home WiFi experience. Eero’s access points and smart home manager app will allow users to control their WiFi networks, passwords, and devices. Control over the home network experience is being fought over by consumer electronics companies and broadband service providers alike.

Tying together the Amazon home experience

Eero adds a major puzzle piece to Amazon’s long-term plan to own the in-home IoT experience. Between Fire Sticks, Fire TVs, Ring video doorbells, Echo devices, and a growing list of appliances and consumer electronics with Alexa voice capabilities, pre-integrated, eero access points can ensure that these devices stay connected all the time.

Early on, eero differentiated itself from other mesh networking suppliers by including 802.15.4 radios on each of its access points. The 802.15.4 is an IEEE standard, designed for low-data rate and low-power consumption wireless communications. It is part of the 802.15 group of standards for what are called wireless personal access networks (WPANs). For example, 802.15.1 is for Bluetooth.

The 802.15.4 standard defines the MAC and PHY layers of the OSI model and provides a basis for other protocols and features to be added in layers 3 through 7. ZigBee, Z-Wave, WeMo, and Thread are common protocol stacks relying on the 802.15.4 standard. The eero devices currently use Thread, but nothing is stopping Amazon from incorporating its favored Z-Wave protocol on these devices. Z-Wave is Amazon’s home automation protocol of choice, as it is used in its Echo Show and Echo Plus home hub devices. Also, a much larger ecosystem of sensors, light bulbs, and other home automation devices relies on Z-Wave.

In fact, I fully expect Amazon to quickly provide eero mesh units using the Z-Wave protocol stack, so that the units could act as distributed home hubs. This would allow users to place smart devices throughout their home, rather than limiting them to areas near a home hub unit. Keep in mind that Z-Wave has a functional distance limit of 300 feet. In larger homes, for which eero access points are ideal, eero can eliminate WiFi dead spots, while also connecting bedroom light bulbs, window sensors, and other Z-Wave devices.

I don’t believe Amazon will integrate an eero-style access point into any of its Echo series of devices, as some have suggested. Amazon wouldn’t have bought eero if that was its strategy. Besides, the Echo devices already pump out their own limited WiFi signal. There is no need to raise its bill of materials (BOM) cost by adding a more complex WiFi chip and series of antenna arrays. After all, the purpose of Echo devices is to provide a voice-based connection to Amazon-hosted services and content, not to become expensive, all-in-one devices.

Eero gives Amazon a way to ensure always-on WiFi connectivity at home. This, in itself, is critical to the performance of Amazon services. More importantly, eero gives Amazon insight into how broadband customers use their home Internet service, which devices they use to access the Internet, and when and how the devices are used. Eero is invasive, for certain. As with any service, users will have to weigh the convenience offered against their privacy concerns.

But you can imagine a scenario where Amazon uses the data collected from eero access points to recommend smart light bulbs, DIY home security systems, window sensors, connected TVs, and other devices based on your data consumption habits and current network setup, among other parameters.

Beyond that, Amazon primarily wants to ensure that the content and services you rely on–including Amazon Video, Music, and Audible–all are performing at their peak. By providing home connectivity, Amazon can also more accurately identify the source of issues delivering 4K UHD video content. Is the problem at home, within the Amazon Web Services CDN, or in the broadband provider’s network? When you don’t own the pipe into the home but own everything else, being able to eliminate your network as the locus of the problem is absolutely critical.

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About the Broadband Access Market Research Report:

The Dell’Oro Group Broadband Access Report provides a complete overview of the Broadband Access market with tables covering manufacturers’ revenue, average selling prices, and port/unit shipments for Cable, DSL, and PON equipment.  Covered equipment includes Converged Cable Access Platforms (CCAP) and Distributed Access Architectures (DAA), Digital Subscriber Line Access Multiplexers ([DSLAMs] by technology ADSL/ADSL2+, G.SHDSL, VDSL, G.FAST), and PON Optical Line Terminals (OLTs), as well as all Cable, DSL, and PON CPE (Customer Premises Equipment.)

2019 Broadband Access Market Outlook: Part 4 of 4

The introduction of more artificial intelligence (AI) and network automation services will allow operators to continue their push to become more than providers of broadband access services. These innovations will allow them to provide in-home network monitoring, troubleshooting, and maintenance issues. Comcast and AT&T have already begun to offer in-home WiFi management platforms, while Adtran, Calix, and other equipment vendors are also expanding their product portfolios to include intelligent, software-based control of CPE.

Just as broadband has become an essential service for most individuals, WiFi has also become a critical service. Like broadband, WiFi is also fraught with customer experience challenges. Broadband service providers are seeking to reduce these difficulties, while also reducing service calls. Introducing AI and network automation services presents a potential revenue opportunity though most operators would be satisfied with a reduction in WiFi-related service calls.

For a growing number of broadband providers, the picture is clear: To counter the economic and mindshare threat posed by OTT providers and consumer electronics players, broadband providers must become better at defining, controlling, and protecting the home-user experience because the home is where service providers most frequently interact with customers.

Operators are using a combination of software-based network managers along with intelligent, mesh-based WiFi extenders and routers to address a growing set of problems with home WiFi. One common problem is that traditional home routers, while powerful enough to generate a signal for most of a home, often have limited and clunky user interfaces. This makes it challenging for users to set specific network parameters or preferences. A second problem in larger or older homes is that brick and cinder block walls can quickly dampen a WiFi signal, creating dead spots. Historically, these dead spots have been addressed through the use of WiFi extenders, which simply repeat the signal generated by the central access point.

However, the problem with traditional WiFi extenders is two-fold:

  • The extender can only do its job when it can detect the original WiFi signal.
  • Each time the signal is repeated or extended, signal loss occurs to the tune of a 30% to 60% reduction in throughput.

Mesh networking capabilities from Plume, eero, Luma, Google, NetGear, D-Link, and similar companies do a far better job of maintaining a clean wireless signal though they still rely on signal repetition. By spacing multiple units throughout a home, these systems effectively create multi-hop communications for wireless devices. Essentially, when a wireless device receives or transmits data, it is either the first leg or anchor in a WiFi relay race. The data transfer then hops from one access point to another until it reaches the primary access point, which is connected to the DSL, cable, or fiber gateway. The multi-hop attributes of a mesh network reduce the distance the wireless signal must hop from one point to the next.

Just as important as improvement of the home WiFi signal is the increase in control users will be offered over their WiFi networks, passwords, and devices on networks with AI and network automation services. Operators will continue to expand their in-home network management apps as a means to retain broadband customers and also to expand into new services, including home automation and security. A centralized dashboard for controlling a customer’s total online experience is an important tool in the fight with Amazon, Google, Apple, Roku, and others to maintain control over the home experience.

To learn more about highlights on Broadband Access market in the next five years (2018-2023), please click here

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2019 Broadband Access Market Outlook: Part 3 of 4

Very few subscribers will ever praise their service provider’s customer service. Improving customer service has always been a challenge for major operators, regardless of the service. But with advances in AI and tools for network automation, operators can fundamentally change the customer experience. Major operators–including AT&T Inc., Comcast, and Bell Canada–will implement a combination of AI and network automation as part of their overall network virtualization efforts.

2019 will see the roll out of AI capabilities for the express purpose of providing proactive data management as operators move toward full network automation. For operators, the following use cases and applications will see the light of day this year:

  • Machine learning and proactive network maintenance, or PNM, to regularly poll active electronics and detect and troubleshoot issues before they impact end subscribers.
  • Software-defined networking (SDN) and network functions virtualization (NFV) will provide far more visibility into individual and collective network elements. They will proactively alert network operations centers (NOCs), about potential hiccups.
  • Virtualization of customer premises equipment (CPE) to allow for customer self-installation and management without contacting customer service to initiate a new service.
  • Monitoring of traffic flows and data usage combined with algorithms to automate speed boosts when customers increase their data consumption.

Comcast, via its X1 service and platforms, is beginning to roll out a number of these capabilities in its effort to reduce truck rolls and improve the overall customer experience. 2019 will see the expansion of these efforts across a much broader range of network operators, including AT&T, Verizon Communications Inc., NTT DOCOMO, British Telecom, and others.

In Part 4, I will examine the ways that operators continue to push further into the home.

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2019 Broadband Access Market Outlook: Part 2 of 4

2019 is expected to be the year that Comcast, Mediacom, and others in the North American market move from lab and field trials of their remote PHY and remote MACPHY or RPD and RMD platforms to general availability. Equipment vendors are ramping up production of their node units to meet what is expected to be a major year of deployments in 2019. We expect Comcast to pursue its goal of using distributed access architecture, or DAA, to dramatically reduce service group sizes from an average of 300 to 400 homes to less than 100. Other operators, including Cox and Spectrum, will quickly follow suit.

We’ve already seen a number of deployments in Europe, particularly at Com Hem and Stofa, designed to help these cable operators roll out DOCSIS 3.1 services, while simultaneously moving away from their traditional, integrated CCAP platforms. Both operators face significant competition from fiber providers, so they view R-PHY as a stepping stone to either full duplex DOCSIS 3.1 or FTTH.

The move to DAAs sets the stage for cable operators not only to expand the bandwidth they can offer end customers by reducing service group sizes, but also to push more edge computing capabilities closer to subscribers. Current optical nodes are nothing more than layer 1 and layer 2 platforms focused primarily on converting radio frequency signals to optical and vice versa. RPD and RMD nodes introduce layer 3 capabilities, as well as a road map to edge computing for more localized media processing and decision-making for applications beyond high-speed internet. With these more intelligent nodes, cable operators can better deliver IoT and wireless services.

Managing an expanded network of intelligent nodes, however, will introduce new challenges, which cable operators hope to address by virtualizing their existing cable modem termination system, or CMTS, functions. By centralizing service orchestration and control, cable operators can potentially reduce the time to deployment for their new distributed infrastructure, as well as the operational costs associated with these new architectures.

For cable operators, virtualization brings scale. By virtualizing and distributing the data and control planes from previously centralized and self-contained hardware platforms, operators can ultimately rely on more generic equipment, while also preparing their networks for the anticipated deluge of traffic from IoT and 5G services.

In Part 3, I discuss operators’ implementation of early use cases for artificial intelligence and network automation.

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Typically, in the early part of the year, I survey the broadband landscape and identify what I believe will be the year’s top trends and technology choices that will result in new product introductions and new service rollouts around the world.

In this 2019 broadband access market outlook series, I first discuss the high-level business and technology trends that will have an impact on network operators. Next, I describe the anticipated trends in broadband access and home networking. Finally, I review how two specific trends—edge computing and virtualization–address the larger business challenges, such as managing an expanded network of intelligent nodes. Here are the posts in my series:


Part 1 of 4: Macro Trends

The margins provided by the services network operators will continue to be squeezed by increased competition, market saturation, and pressure from OTT and cloud companies, which can often distribute similar services and applications at a reduced price. As a result, network operators will continue to reduce the cost of delivering services by:

  • Moving more layer 3 functionality from dedicated access platforms and routers to servers in the cloud.
  • Automating the provisioning, management, and troubleshooting of all network services; and using artificial intelligence to anticipate faults and other network-related issues.
  • Increasingly moving away from proprietary hardware platforms in their access, edge, and core networks toward COTS hardware and servers with media gateway functionality.

Along those lines, a growing number of operators will divest their network assets and focus solely on content creation and distribution, while maintaining close relationships with underlying network operators to give them a competitive advantage over other OTT providers. Companies such as Crown Castle, American Tower, and other infrastructure providers are potential candidates for purchasing and managing network assets.

Those operators that don’t split out their network assets will continue to focus on the distribution of network platforms, intelligence, and workload processing. They will move away from centralized headends, data centers, and central offices to edge facilities, including hub sites, remote nodes, and modular edge data centers. Minimizing latency will become just as important to users as total broadband throughput. Operators that can deliver on both will secure the most subscribers and the highest revenue.

One ongoing challenge facing operators as they distribute more active electronics into their access networks is the scarcity of qualified labor to install, provision, and manage those platforms. Because of this labor shortage, operators will have to make smart and efficient decisions when it comes to deploying their technicians to install and provision these advanced platforms.

Though this is not an exhaustive list, I believe that these macro trends are under discussion among executives at many network operators. Operating a network is an extremely capital-intensive business. With the continued influx of software-based networking principles from the IT domain, data centers, and CDNs, service margins can certainly improve. Time will tell how quickly network operators embrace these principles throughout their access, edge, and core networks.

In Part 2, I discuss how cable operators use distributed access as their platform for edge computing and virtualization.

China Market to Decelerate and Grow at Pace with the Rest of Asia Pacific

The latest Dell’Oro Group Wireless LAN (WLAN) 5-Year Forecast report (2018-2023) indicates that the Enterprise WLAN market will slow as it approaches $9.6 B over the next five years. The China market is expected to decelerate and grow at pace with the rest of the Asia Pacific region.

Chinese service providers are no longer deploying WLAN equipment in mobility environments, resulting in 2018 as one of the slowest growth years to date.  Despite the slowdown, we expect the WLAN market in China to grow over the forecast period. We anticipate wireless expansion and transition to new 802.11ax (Wi-Fi 6) technology in the enterprise segment as key growth drivers for the China market.

While 5G will enter the market during the forecast period, we maintain our position on its impact on WLAN.   As discussed in our report, we do not recognize cellular (including 5G) and private LTE networks as drivers for enterprise customers to substitute WLAN for in-building connectivity. Following are additional key takeaways from the WLAN 5-Year Forecast Report:

  • Demand for WLAN equipment and an increase in average selling price will move the WLAN market to approach $17.6 B in revenue over the next five years.
  • In comparison to previous technology (802.11ac), we expect 802.11ax to sustain a price premium for a longer period.
  • The revenue contribution from licenses is expected to exceed the contribution from access points for the Enterprise Cloud.
  • In the SOHO market, wireless router shipments are projected to surpass 50 million.

About the Wireless LAN 5-Year Forecast Report

The Dell’Oro Group Wireless LAN 5-Year Forecast Report offers a complete overview of the industry, covering Enterprise Outdoor and Indoor markets, SOHO markets with tables containing manufacturers’ revenue, average selling prices, and unit shipments by the following wireless standards: 802.11ax, 802.11ac Wave 1 vs. Wave 2, 802.11n, and historic IEEE 802.11 standards.